The economic recovery may be moving on from ‘green shoots’ to more stable growth, with 2013 the strongest year since 2007, before shocks like the sub-prime lending crisis, the credit crunch, and the onset of the global recession.
In Q4 2013, UK gross domestic product was up 0.7% compared with Q3, with only construction seeing a decrease in output among the four main industrial groupings used.
While construction output declined by 0.3%, agriculture saw a rise of 0.5%, production 0.7% and services 0.8%.
Quarterly GDP was up by 2.8% year on year, while the full year of 2013 is estimated to have created GDP 1.9% higher than in 2012.
Azad Zangana, European economist at asset management firm Schroders, said the figures suggest that “the UK is close to completing its recovery”.
However, he expressed some concern about the specifics of the recovery, with much of the growth centred on the retail and services sectors.
This, he said, has funded an increase in debt, while low productivity growth throughout 2013 means the argument is still in favour of only modest pay rises, contrasted against the current rate of inflation.
Mr Zangana is now looking for clear pointers on what can be expected over the course of 2014, notably in the case of the Bank of England base rate.
He said: “The Bank of England must provide further analysis and guidance in the February Inflation Report as to the future path of monetary policy.”
The Inflation Report is frequently a landmark for monetary policy; while the base rate has now remained unchanged since March 2009, 10 of the previous 19 base rate changes – dating back to the beginning of 2004 – were made in the same month as the quarterly report was published.
For 2014, that is likely to make February, May, August and November key months for economists to watch.